WellPoint to Buy CareMore for $800 Million

9:45 a.m. | Updated WellPoint, one of the nation’s largest health insurers, has agreed to buy CareMore for about $800 million, according to people briefed on the transaction.

The deal, which was announced on Wednesday morning, would add to WellPoint’s already dominant position in California, Arizona and Nevada, where the privately held CareMore provides managed care to about 54,000 elderly people.

“The Medicare market is particularly significant for WellPoint’s growth strategy,” Angela F. Braly, chairwoman and chief executive of WellPoint, said in a statement. “We anticipate that more than one million Baby Boomers will age into Medicare every year between now and 2030 across our 14 Blue states.”

WellPoint, which holds the license for Blue Cross in California and for Blue Cross Blue Shield in about a dozen other states, is the largest American health insurer in terms of patients covered.

CareMore, based in Downey, Calif., is owned by CCMP, the New York private equity firm. CCMP, formerly JPMorgan Partners, acquired the business in 2006. The firm is expected to earn about five times its original investment in the company, people familiar with the deal’s terms said. WellPoint expects the acquisition to increase earnings per share by 2013.

The transaction should turn heads in the deal world because health care mergers and acquisitions have slowed as a result of the uncertainty surrounding President Obama’s health care overhaul and its effect on the managed care sector, especially Medicare organizations.